Lottery Industry Pitches For Uniform GST Rate Of 12%
A customer uses a pencil to fill out a lottery form. (Photographer: Maika Elan/Bloomberg)  

Lottery Industry Pitches For Uniform GST Rate Of 12%


The lottery industry has pressed for a uniform Goods and Services Tax rate of 12 percent and removal of tax on the prize money, saying the existing dual rate is hampering the growth of the business.

Currently, a GST of 12 percent is levied on state lotteries sold within a state and 28 percent on those sold outside that state.

To sort out differences in the views among states, the GST Council had earlier constituted an eight-member group of ministers under the chairmanship of Maharashtra Finance Minister Sudhir Mungantiwar.

The Council in its July meeting had also decided to seek legal opinion from the Attorney General on the issue.

In a representation made to Finance Minister Nirmala Sitharaman, All India Federation of Lottery Trade & Allied Industries suggested that the GST Council could consider imposing GST on lotteries after abating the prize money component of the lottery ticket since the said amount never forms part of the income in the lottery trade.

“In the alternative, we represent and request that the discriminatory rate of tax be set aside and all the lotteries may be taxed at the rate of 12 percent after adjusting the prize money component from the face value of lottery ticket,” the association’s vice president Kamlesh Vijay said in the representation.

Currently, all lotteries are organised by states as per the provisions of Lottery Regulation Act 1998.

According to Vijay, who is also group Chief Executive Officer of of Sugal & Damani, the lotteries were taxed at 6 percent before the implementation of the GST with effect from July 1, 2017.

Currently, lotteries are permitted in about 10 states, including Maharashtra, West Bengal, Punjab and Arunachal Pradesh. Lotteries have been operating in the country since 1969.

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